Checking out a nice bottom

Real Estate Agent with Healdsburg Sotheby's International Realty

I work mostly in Sonoma County, but Marin is close to home and some of the same buyers will look in both Novato and Petaluma. I posted about finding a bottoming trend in one of the Sonoma County areas I work in and wanted to see if Novato in northern Marin showed the same trend.

Novato Real Estate ChartI made a chart showing the median price of sold single family residences in the three Novato zip codes. Each zipcode has both a 90 day moving average as well as a more volatile 7 day moving average. There are always lots of interesting tidbits to pull out of charts like this so I'm going to walk you through how I use this to understand a bit more of the market. First of all, the orange and red lines (94945 and 94949 respectively) start out at the same place last May at around $870K for median priced homes. As of early April, the 94949 zip code median price had dropped to around $750K. Not bad with respect to the general real estate market. The 94945 zip code, by contrast, had dropped to 650K, more than $100,000 less. It's hard to make a clear reading without checking each transaction to find out if there were unusual circumstances, but it's an observation that jumps off the chart. The lowest median price zipcode, 94947, dropped from around $670K to about $590K in the same time frame, so it didn't fare too badly in comparison with 94945.

Each of the zip codes also has the more jagged 7 day median price line. I have drawn red circles around the points on the 7 day line that might represent the Novato SFR market finding a possible bottom. We're in the spring so activity tends to be higher than otherwise, but the same time last year saw a still-declining market. I'm not going to call this a market bottom since my crystal ball is as cloudy as everyone else's. What I do have is a spreadsheet and chart that tells me prices have firmed up this spring. We haven't seen the line move up to show the price change trend on the 90 day moving averages, but I like being able to advise my clients of market moving trends like this before everybody else spots them. (Ssshhhh, don't tell anyone about this post!) That's what makes it so much fun to watch both the 7 day and 90 day lines.

A final caveat. Markets like Novato have small enough sales volume that just a few exceptional sales can skew the data up or down. When I want to analyze situations like this more closely, I'll actually divide the sales into quartiles to see if one segment is signifcantly out of sync with the rest. As an example, I can tell you that in the top quartile in Santa Rosa prices are still falling even though they have moved up in the lower half of the market. So take this chart with a grain of salt and give me a call if you want a more detailed analysis of any area in the North Bay. For the best bargains in the North Bay check out my REO Marin site for foreclosed homes in Marin County, REO Sonoma site for bank owned homes in Sonoma County, and these other links:

REO Napa
REO Mendocino
REO Lake County
REO Vallejo



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